<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
Commission file number 0-23268
AMERICAN TECHNOLOGIES GROUP, INC.
(Name of small business issuer in its charter)
NEVADA 95-4307525
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1017 SOUTH MOUNTAIN AVENUE, MONROVIA, CA. 91016
(Address of principal executive offices) (zip code)
Issuer's telephone number: (818) 357-5000
Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes __X__ No ____
As of March 14, 1997, the registrant had 19,790,751 shares of Common Stock
outstanding.
<PAGE>
TABLE OF CONTENTS
PAGE
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
Condensed Consolidated Balance Sheets as of January 31, 1997
and July 31, 1996 3
Condensed Consolidated Statements of Operations for the Six and Three
Month Periods ended January 31, 1996 and 1997 5
Condensed Consolidated Statements of Cash Flows for the Six Month
Periods ended January 31, 1996 and January 31, 1997 6
Notes to Condensed Consolidated Financial Statements 7
ITEM 2 Management's Discussion and Analysis 11
PART II OTHER INFORMATION
ITEM 2 Changes in Securities 12
ITEM 6 Exhibits and Reports on Form 8-K 12
Signatures 13
Page 2
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JULY 31, 1996 AND JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
July 31, January 31,
ASSETS 1996 1997
- ----------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 2,486,313 $ 956,845
Accounts Receivable (net of $10,000 allowance) 43,326 85,436
Subscriptions Receivable 8,552 5,419
------------- -------------
Total Accounts & Subscriptions Receivable 51,878 90,855
Amounts Due From Shareholders 2,500 -
Notes Receivable - 85,385
Deferred Tax 261,000 261,000
Inventory 43,961 134,349
Other Current Assets 412 -
------------- -------------
Total Other Current Assets 307,873 480,734
PROPERTY, EQUIPMENT AND MINERAL PROPERTIES
Mining Property and Equipment 5,470,089 5,715,423
Other Property and Equipment 511,747 482,404
Accumulated Depreciation (240,135) (245,107)
------------- -------------
Net Property, Equipment and Mineral Properties 5,741,701 5,952,720
GOODWILL, net of accumulated amortization of
$1,747,717 at July 31, 1996 and $2,007,717 at
January 31, 1997 1,394,023 1,134,023
------------- -------------
TOTAL ASSETS $ 9,981,788 $ 8,615,177
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated balance sheets.
3
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JULY 31, 1996 AND JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
July 31, January 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1997
- -------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
LIABILITIES
Accounts Payable $ 566,136 $ 599,721
Accrued Liabilities 31,297 54,719
Related Party Payables 76,000 46,000
Deferred Subscription Income 110,094 96,847
Subscription Production 40,720 -
Current Portion of Notes Payable 180,472 180,472
------------- -------------
Total Current Liabilities 1,004,719 977,759
Deferred Tax Liability 1,347,224 1,347,224
Convertible Debentures - 700,000
Other Long-Term Liabilities 363,772 286,380
Long Term Portion of Notes Payable 840,020 885,135
------------- -------------
2,551,016 3,218,739
Total Liabilities 3,555,735 4,196,498
------------- -------------
STOCKHOLDERS' EQUITY
Series A Preferred - $ .001 par value, 10,000,000 authorized, 378 378
378,061 issued and outstanding at July 31, 1996
378,061 issued and outstanding at January 31, 1997
Series B Preferred - $.001 par value, 500,000 authorized, - -
none issued and outstanding at July 31, 1996
none issued and outstanding at January 31, 1997
Series C Preferred - $.001 par value, 300,000 authorized 2 -
2,000 issued and outstanding at July 31, 1996
none issued and outstanding at January 31, 1997
Common Stock: $.001 par value, 100,000,000 authorized, 16,220 19,079
16,220,264 issued and outstanding at July 31, 1996
19,079,369 issued and outstanding at January 31, 1997
Additional Paid in Capital 23,117,088 25,254,086
Stock Subscriptions 771,298 148,422
Deficit (17,478,933) (21,003,286)
------------- -------------
Total Stockholders' Equity 6,426,053 4,418,679
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,981,788 $ 8,615,177
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated balance sheets.
4
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX AND THREE MONTH PERIODS ENDED
JANUARY 31, 1996 AND JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
January 31, January 31,
------------------------- -----------------------
1996 1997 1996 1997
- ---------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES
Publishing $ 52,538 $ 164,838 $ 34,946 $ 74,812
Rental Property 39,180 - 7,791 -
Product Sales 49,689 125,185 27,524 68,355
Other 152,638 50,008 152,638 24,269
--------- ---------- --------- ---------
Total Revenues 294,045 340,031 222,899 167,436
COSTS AND EXPENSES
Publishing Operations 155,271 253,559 71,638 156,583
Rental Operations 134,000 - 68,921 -
Product Sales and Marketing 185,759 720,462 131,540 205,183
Mining Operations 264,985 668,082 126,641 341,481
Research and Development 211,380 488,745 102,826 200,819
Officers' Compensation 259,060 448,750 125,838 224,811
General and Administrative 753,216 905,524 501,281 477,817
Interest Expense - 1,172,979 - 1,114,777
Amortization of Intangible Assets 260,000 260,000 130,000 130,000
Other 16,013 - 15,763 -
---------- ---------- --------- ---------
Total Costs and Expenses 2,239,684 4,918,101 1,274,448 2,851,471
LOSS BEFORE PROVISION
FOR INCOME TAXES 1,945,639 4,578,068 1,051,549 2,684,035
PROVISION FOR INCOME TAXES - - - -
---------- ---------- ---------- ----------
NET LOSS $ 1,945,639 $ 4,578,068 $ 1,051,549 $ 2,684,035
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
NET LOSS PER SHARE $ 0.14 $ 0.31 $ 0.07 $ 0.19
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 13,607,625 17,473,355 14,167,398 18,273,852
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated statements.
5
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
January 31,
----------------------------------
1996 1997
- ----------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Loss $ (1,945,639) $ (4,578,068)
Adjustments to reconcile net loss to net cash used:
Depreciation and Amortization 297,309 325,684
Amortization of Deferred Financing Cost and Debt Discount - 1,053,715
Stock Issued as Consideration for Debt Reduction 371,160 -
Stock Issued as Consideration for Services 365,397 128,460
Interest Expense Added to Principal Balances - 95,068
Changes in Assets and Liabilities:
Accounts Receivable 24,709 (54,640)
Advances to Stockholders/Officers - (82,885)
Inventory - (90,388)
Other Current Assets 611 412
Accounts Payable and Accrued Expenses (626,711) (115,549)
Note Payable Due to Stockholders/Officers (10,000) -
Deferred Subscription Income - (22,237)
------------ -------------
Net Cash (Used in) Operating Activities (1,523,164) (3,340,428)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Property and Equipment (172,214) (256,502)
Proceeds from Sale of Marketable Securities 9,996 -
Proceeds from Sale of Commercial Properties 500,177 -
Advances to Stockholders/Officers (4,000) -
------------ -------------
Net Cash Provided by/(Used in) Investing Activities 333,959 (256,502)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on Notes Payable (297,122) -
Payments on Capital Lease - (50,000)
Payments due Stockholder/Officer - (30,000)
Net Proceeds from Debenture Issuance - 1,823,500
Net Proceeds from Stock Issuance & Stock Subscription 3,735,262 323,962
------------ -------------
Net Cash Provided by Financing Activities 3,438,140 2,067,462
NET INCREASE (DECREASE) IN CASH 2,248,935 (1,529,468)
CASH AND CASH EQUIVALENTS, Beginning of Period 86,019 2,486,313
------------ -------------
CASH AND CASH EQUIVALENTS, End of Period $ 2,334,954 $ 956,845
------------ -------------
------------ -------------
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated statements.
6
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Rule 10-01 of Regulation S-X. Accordingly, they do not include all
of the information and notes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included.
Operating results for the six and three month periods ended January 31,
1996 and January 31, 1997 are not necessarily indicative of the results
that may be expected for the year ended July 31, 1997. For further
information, please refer to the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-KSB/A
for the year ended July 31, 1996.
2. ORGANIZATION, LINE OF BUSINESS AND SIGNIFICANT BUSINESS RISKS
a. ORGANIZATION AND LINE OF BUSINESS
American Technologies Group, Inc. (the Company or ATG) was formed on
September 27, 1988, and merged with an inactive publicly owned company
named One Stop Printing, Inc., a Minnesota corporation, formerly General
Cybernetics Corporation. General Cybernetics Corporation was
incorporated in September 1968 and was merged with and changed its name to
One Stop Printing, Inc. in December 1972. In February 1991, First Western
Acquisitions, Inc. (FWA), a newly-formed Nevada Corporation, acquired
effective control of the Company in a reverse merger transaction with
the inception of the new entity beginning in February 1991 using the
name ATG. Prior to February 1991, the Company was inactive. ATG was in
the development stage until July, 1994 at which time it acquired the
publishing business of Final Frontier Publishing, Inc., now named ATG
Media, Inc., a Minnesota corporation (ATG Media).
In July 1994, ATG acquired an 85 percent interest in ATG Media in an
acquisition accounted for by the purchase method of accounting with the
results of operations of ATG Media consolidated with the results of the
Company from the date of acquisition (July 29, 1994). In August 1994,
ATG completed the acquisition of the remaining 15 percent interest of ATG
Media at which time it became a wholly-owned subsidiary.
In April 1995, ATG acquired 100 percent of the common stock of New
Concept Mining, Inc. (New Concept Mining) a Nevada corporation. The
acquisition of New Concept Mining was accounted for by the purchase
method of accounting with the results of operations of New Concept
Mining consolidated with the results of the Company from the date of
acquisition (April 21, 1995).
ATG is a research and development company principally involved in
developing, through in-house investigation and science, proprietary
energy and environmental systems which offer innovative methods to
reduce, and in some cases eliminate, hazardous chemical by-products or
emissions resulting from industrial production and combustion processes.
ATG Media develops and markets space and science related publications,
books and merchandise for professionals involved in, and enthusiasts of,
space exploration. ATG Media's principal publication is Final Frontier
Magazine which was first published in 1986.
Page 7
<PAGE>
New Concept Mining was formed for the purpose of acquiring mineral
properties with the long-term goal of developing and mining these
properties. Some of the mineral properties acquired are currently
non-producing and have either never been mined or mining activities were
ceased in excess of ten years ago.
b. SIGNIFICANT BUSINESS RISKS
Since its inception, the Company has incurred significant operating
losses. The ability of the Company to successfully carry out its
business plan is dependent upon (1) its ability to obtain sufficient
additional capital, (2) generate significant revenues through its
existing assets and operating businesses which it has acquired, and (3)
overcome significant product development issues.
The Company plans to raise additional working capital, if necessary,
through private offerings, as well as attain listing on a national
exchange. The successful outcome of future activities cannot be
determined at this time and there are no assurances that if achieved,
the Company will have sufficient funds to further develop its mineral
properties and execute their business plans or generate positive
operating results.
3. CONVERTIBLE DEBENTURES
In November, 1996, the Company issued $1,400,000 of 7 percent
Convertible Debentures (7% Debentures), maturing November 1, 1999. The
accrued interest is due upon the earlier of conversion or maturity. Up
to 50 percent of the original principal amount of the 7% Debentures is
convertible into Common Stock commencing 45 days after issuance and up to
100 percent of the original principal amount of the 7% Debentures is
convertible into Common Stock commencing 75 days after issuance, at the
sole option of the holder. The conversion price is equal to the lower
of $2.775 or 70 percent of the average closing bid price of the Common
Stock for the five trading days prior to conversion. $700,000 of the 7%
Debentures plus accrued interest were converted into 550,107 shares of
Common Stock during the quarter ended January 31, 1997 and the remaining
$700,000 of the 7% Debentures plus accrued interest were converted into
496,860 shares of Common stock subsequent to the end of the quarter.
In September, 1996, the Company issued $700,000 of 6 percent Convertible
Debentures (8% Debentures), maturing September 30, 1998. In November,
1996, $350,000 of the 8% Debentures were converted into 209,874 shares
of Common Stock and in January, 1997, $350,000 of the 8% Debentures were
converted into 214,622 shares of Common Stock.
4. CAPITAL STOCK
a. COMMON STOCK
During the three months ended January 31, 1997, the Company issued 2,000
shares of Common Stock for services rendered valued at $3,460. All
shares issued were valued at estimated market value at date of issuance.
b. PREFERRED STOCK
ATG's authorized preferred stock is 50,000,000 shares, par value $0.001
per share. The preferred stock may be issued from time to time in
series having such designated preferences and rights, qualifications and
limitations as the Board of Directors may determine.
The Company has designated a series of preferred stock called Series A
Convertible Preferred Stock (Series A Stock) and has authorized
10,000,000 shares. The Series A Stock receives a ten percent higher
dividend than the Common Stock, is entitled to one vote per share,
shares equally with the Common Stock upon liquidation and is convertible
into one share of Common Stock at any time at least five years after
issuance upon the payment of $3.00 per share. As of January 31, 1997,
378,061 shares of Series A Stock were outstanding, no shares having been
converted.
Page 8
<PAGE>
The Company has designated a second series of preferred stock called
Series B Convertible Preferred Stock (Series B Stock) and authorized
500,000 shares. The Series B Stock has a liquidation preference of
$8.00 per share, is entitled to one vote per share and is convertible
upon holders request without the payment of any additional consideration
during the first year following issuance into the number of shares of
Common Stock equal to the quotient of $8.00 per share and the Market Value
per Share for the ten trading days immediately preceding conversion and in
subsequent years into one share of Common Stock for each share of Series
B Stock. Of the 224,204 Series B Stock subscriptions originally issued
in connection with the ATG Media acquisition, an aggregate 190,454
subscriptions were converted into 507,276 shares of Common Stock in
fiscal years 1995 and 1996. During the first fiscal quarter of 1997,
the remaining 33,750 shares of Series B Stock subscriptions were
canceled in exchange for 15,000 shares of Common Stock.
The Company has designated a third series of preferred stock called
Series C Convertible Preferred Stock (Series C Stock) and authorized
2,000 shares. The Series C Stock has a liquidation preference of $1,000
per share, an 8 percent coupon payable at the time of conversion, is
non-voting and is convertible upon holders request without the payment of
any additional consideration up to 50 percent on the forty-fifth day
following the original issuance and is fully convertible on the
seventy-fifth day following the original issuance into the number of
shares of Common Stock equal to $1,000 per share plus accrued dividends
divided by 70 percent of the Market Value per share for the five trading
days immediately preceding conversion. The Series C Stock automatically
convert on the second anniversary of the date of issuance. During the
first fiscal quarter of 1997, all of the outstanding shares of Series C
Stock were converted into 1,490,702 shares of Common Stock.
c. STOCK OPTION PLANS
During fiscal 1994, the Company adopted the 1993 Incentive Stock Option
Plan (Incentive Plan) and the 1993 Non-Statutory Stock Option Plan
(Non-Statutory Plan) to grant options to purchase up to a maximum of ten
percent of the total outstanding Common Stock of the Company. Options
are issued at the discretion of the Board of Directors to employees only
under the Incentive Plan and to non-employees under the Non-Statutory
Plan. Under the Incentive Plan, the exercise price of an Incentive Stock
Option shall not be less than the fair market value of the Common Stock
on the date the option is granted. However, the exercise price of an
Incentive Stock Option granted to a ten percent stockholder (as defined
in the Incentive Stock Option Plan), shall be at least one hundred ten
percent of the fair market value of Common Stock on the date the option
is granted. Exercise prices of options granted under the Non-Statutory
Plan may be less than fair market value. Each option expires at the
date fixed by the Board upon issuance but in no event more than ten
years. The plans expire December 2002.
As of January 31, 1997, there were 1,912,500 outstanding options
exercisable at between $1.50 and $6.25 per share. During the three
month period ended January 31, 1997, Incentive Stock Options covering
423,000 shares were granted at an exercise price of $1.70 per share and
70,000 shares were granted at an exercise price of $1.87 per share and
Non-Statutory Stock Options covering 20,000 shares were granted at an
exercise price of $1.70 per share. No stock options granted under either
Plan has been exercised since July 31, 1996. As of January 31, 1996,
1,115,875 options granted under the Plans have vested.
d. STOCK SUBSCRIPTIONS
As of January 31, 1996, the Company had not issued (i) 15,000, shares of
Common Stock owed for services rendered prior to January 31, 1997, valued
at $30,000, (ii) 6,062, shares of Common Stock owed for interest accrued
prior to January 31, 1997 and (iii) 58,707 shares of Common
Page 9
<PAGE>
Stock sold under private placements during fiscal 1996 for an aggregate
of $106,070 in cash received prior to July 31, 1996. These amounts have
been included within stock subscriptions in the accompanying consolidated
balance sheets.
5. SUBSEQUENT EVENT
In March, 1997, the Company issued $2,000,000 of 7.5 percent Convertible
Debentures (7.5% Debentures), maturing March 1, 2000. The accrued
interest is due upon the earlier of conversion or maturity. Up to
one-third of the original principal amount of the 7.5% Debentures is
convertible into Common Stock commencing 45 days after issuance, up to
two-thirds of the original principal amount of the 7.5% Debentures are
convertible into Common Stock commencing 75 days after issuance and up to
100 percent of the original principal amount of the 7.5% Debentures is
convertible into Common Stock commencing 105 days after issuance, at the
sole option of the holder. The conversion price is equal the lower of
$3.225 or 75 percent of the average closing bid price of the Common Stock
for the five trading days prior to conversion.
Page 10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Total assets decreased by $1,366,600 from $9,981,800 to $8,615,200 at July
31, 1996 and January 31, 1997, respectively. This decrease was the net
result of a decrease in current assets of $1,316,700, primarily consisting of
a cash decrease of $1,529,500 partially offset by increases in account,
subscription and note receivables ($124,400) and inventory ($90,400) and a
decrease of Goodwill of $260,000 and an increase in Mining Property &
Equipment of $245,300.
Total liabilities increased by $640,800 from $3,555,700 to $4,196,500 at July
31, 1996 and January 31, 1997, respectively. This increase was principally
the result of the issuance of the convertible debentures partially offset by
the reduction of notes payable and long term liabilities ($32,300),
subscription production ($40,700) and related party payables ($30,000).
The Company's consolidated revenue decreased by $55,500 from $222,900 to
$167,400 for the quarters ended January 31, 1996 and 1997, respectively.
This decrease in revenue was primarily attributable to other revenue during
the quarter ended January 31, 1996, partially offset by the increases in
publishing of $39,900 due to only one issue of Final Frontier Magazine being
published during the quarter ended January 31, 1996, and product sales
($40,900). ATG's consolidated loss increased $1,632,500 from $1,051,500 to
$2,684,000 for the quarters ended January 31, 1996 and 1997, respectively.
This increased loss was principally the result of the increase in interest
expense related to the convertible debentures and the debt reduction as well
as the result of increases in all categories of expenses due to increased
business operations made possible by the improved liquidity of the Company,
except for a reduction in general and administrative as a result of the
reversal of certain accruals.
The Company's cash flow used in operations increased from $1,523,200 to
$3,340,400 for the six months ended January 31, 1996 and 1997, respectively.
The primary source of working capital during the six months ended January 31,
1997 was the sale of $2,100,000 of Debentures for net proceeds of $1,823,500
and net proceeds from the sale of stock and stock subscriptions of $324,000.
In the comparable period in 1996, the primary source of working capital was
the sale of Common Stock for net proceeds of $3,735,300. The Company
anticipates that it will be able to continue its operations at the current
level for the remainder of the fiscal year without the sale of additional
securities or generating significant revenues from existing operations,
however, there can be no assurance to this effect.
Page 11
<PAGE>
PART II
OTHER INFORMATION
ITEM 2 CHANGES IN SECURITIES
(a) Not applicable.
(b) Not applicable.
(c) During the three months ended January 31, 1997, two thousand (2,000)
shares of Common Stock were issued to one individual in consideration of
services rendered. The issuance is claimed to be exempt from registration
under the Securities Act of 1933, as amended (the "Act"), pursuant to Section
4(2) thereof, as a transaction not involving a public offering, in that the
purchaser had full access to all material information concerning the Company
and was acquiring the shares for investment and not with a view to
distribution. There were no underwriting discounts or commissions paid in
connection with the issuance of the Common Stock nor was any advertising or
other form of general solicitation used by the Company.
On March 14, 1997 the Company sold for cash to a foreign investor a 7.5%
Convertible Debenture Due March 1, 2000 in the amount of Two Million Dollars
($2,000,000) (the "7.5% Debenture"). The sale was exempt from registration
under the Securities Act of 1933, as amended, pursuant to Regulation S
adopted thereunder.
Up to one-third of the original principal amount of the 7.5% Debentures is
convertible into Common Stock commencing 45 days after issuance, up to
two-thirds of the original principal amount of the 7.5% Debentures are
convertible into Common Stock commencing 75 days after issuance and up to 100
percent of the original principal amount of the 7.5% Debentures is
convertible into Common Stock commencing 105 days after issuance, at the sole
option of the holder; however the right to convert the 7.5% Debenture expires
on March 1, 2000. The conversion price is equal the lower of $3.225 or 75
percent of the average closing bid price of the Common Stock for the five
trading days prior to conversion.
D.J. Ltd. and Corporate Capital Management, LLC. acted as placement agents
and together received Two Hundred Thousand Dollars ($200,000) and warrants to
purchase 200,000 shares of Common Stock at an exercise price of Four Dollars
($4.00) per share. The warrant has a five year term and certain "piggy-back"
registration rights under the Securities Act of 1933, as amended.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
None.
(b) REPORTS ON FORM 8-K.
The Company filed one Report on Form 8-K dated November 26, 1996
reporting under Item 9.
Page 12
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN TECHNOLOGIES GROUP, INC.
By: /s/ John Collins
-----------------
John Collins
Chairman of the Board,
Chief Executive Officer and
Treasurer
Date: March 24, 1997
Page 13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1996
<PERIOD-END> JAN-31-1997
<CASH> 956,845
<SECURITIES> 0
<RECEIVABLES> 437,240
<ALLOWANCES> 0
<INVENTORY> 134,349
<CURRENT-ASSETS> 1,528,434
<PP&E> 7,331,850<F1>
<DEPRECIATION> 245,107
<TOTAL-ASSETS> 8,615,177
<CURRENT-LIABILITIES> 4,196,498
<BONDS> 0
0
378
<COMMON> 19,079
<OTHER-SE> 4,399,222
<TOTAL-LIABILITY-AND-EQUITY> 8,615,177
<SALES> 340,031
<TOTAL-REVENUES> 340,031
<CGS> 0<F2>
<TOTAL-COSTS> 3,745,121
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,172,979
<INCOME-PRETAX> (4,578,068)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,578,068)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,578,068)
<EPS-PRIMARY> (.31)
<EPS-DILUTED> 0<F3>
<FN>
<F1>INCLUDES GOODWILL $1,134,023 NET
<F2>NOT CALCULATED
<F3>NOT CALCULATED
</FN>
</TABLE>
